Can You Guess Today's Theme?

What's up everyone? In today's episode, I'm going to break down my trades from the morning and I'm going to see if you can identify the theme that we had in the market today. Now, when I first logged in this morning on my phone at about 6:30 in the morning, we had a leading gainer and as you might guess, it was a Chinese stock with no news. However, it started trading around 4:30 in the morning and already made a pretty big move just between 4:30 and 6:30. So, as we sat down for the 7 a.m. kind of unofficial open to pre-market trading for most retail traders, a lot of retail brokers don't allow trading before 7 a.m. So 7 a.m. is kind of when things really begin in earnest. Unfortunately, WXM had already made a pretty big move. And look at this candle forming right now. Do you see that drop? Well, there you go. That has been the theme of today. In fact, look at the five-minute chart on this stock. It's actually been quite difficult to trade. If you're red on it, I'm not surprised at all. This is a stock that initially squeezed up here early in the trading session from a low of $4 up to a high of 950. Then it comes all the way back down to four. Then it goes back up to 8. Then it drops back down to 7. Goes back up here to 950. So we've got first topping tail, second topping tail. Tries to push harder and it can't. And so then I drew a line connecting those two levels. Right around 7 a.m. it drops down 6:45, does a little inverted head and shoulders and squeezes back up. But I didn't feel comfortable taking that trade right there. Why? I don't know. I just felt like this ascending resistance level was going to be an issue. And sure enough, it was. It squeezed up to that level and then dropped back down for one two three four five six consecutive red five minute candles. Then, you know, some traders were like, I'm going to watch here for the first candle to make a new high. And I said, this is not a bull flag. A bull flag is when you have, if you want to see a bull flag, I'll turn on my whiteboard and I'll show you. That's not a bull flag. A bull flag is when you have a big move up, a pullback. So, let's see. I'm going to draw it out for you. All right. So, we've got a big move up right here. This is the part of the bull flag right there. And then it pulls back. It dips down, maybe one red candle, maybe two, maybe three, and then it continues higher. So, what are important characteristics of a bull flag? It should not retrace more than 50% of the initial move up the nine moving average. It should be above the VWAP, which I have in my dotted orange line. It should be above the 9 EMA which I usually have in my gray line here pulling it back to the 90 EMA and the volume weight and sorry the uh 20 moving average is usually a little bit below and should be above that as well. So these are the areas that I'm kind of watching during a bull flag. So if that's a bull flag, what you see right here is certainly not a bull flag. Yes, this rallied all the way up. It came all the way back down. It's a bounce off the VWAP, which is fine. first five minute candle to make a new high. All right. Well, it ends up rallying back up and I was I watched it and I was like, I can't possibly because of this candle. I can't trust it. But it goes all the way back up and nearly double tops back at about 1174. Then it drops down again, pops up, knifes down, goes back to the VWAP, bounces again, and then right here curls once more. And I watched it right through this area. In fact, I pulled it up on my one minute chart. I was kind of really getting dialed in and I was thinking, you know, all right, we just broke over this level of 1025, but there was never really a clean pullback. Kind of went to 11, drops back down, then goes, and I just said, no, I can't. Let's see if it holds this level because I thought maybe we would get a triple top. Instead, it just burst right through 1160, goes to 14, and then drops back down to 10. Yikes. So you could see how easy it could have been to go deep into the red on a on a move like that. It was not clean. That's not what I was wanting to see. Not not at all. So then, you know, it starts to rally back up here going into the opening bell. I was like, not a chance. I am not trading that. I'm not touching it. And so I didn't take a single trade on WXM. It's our leading gainer. And I just never felt comfortable breaking the ice on it. So that all started at 7 a.m. All right. So that was well 4:00 a.m. and so I was watching coming into 7. So then what was the next stock that I was considering? Well, let's sorry, let's go back on the scanners here. So after that 7 a.m. move, we had that pop at 7 uh on WXM. Then things were kind of dull for a little bit. And by the way, we had a couple other stocks that were hitting the scanners. Let me just go back here for a second. So we had a couple other stocks that were hitting the scanners between um you know 4 a.m. and 7 a.m. NC hit the scanner. WYG hit the scanner. You can see the charts. These popped up. They didn't hold up super well. Then we had ELPW. This one hit the scanners. That one sold off. So, it's kind of a lot of this pop and drop stuff. Keep going back up to 9:30. I got to scroll back down. So, at 7, where is it? So, come on. So, at 7 a.m., um, what ends up happening on this is, uh, we got a couple other stocks that pop up and, uh, we had AIHS. So, AIHS hits my scanners and this stock surprisingly goes from $2 all the way up to 250 up to three. But again, look at that topping tail right there. Topping tail. So, on the one minute chart, I saw that initial squeeze up and I said, I don't know, you know, the float's a little higher. 14 million shares what I was seeing. Has that pop, drops down, then it rallies back up through three, up to 380, up to four, and then flushes back down. Drops lower. I missed it. No trades. I just I wasn't sure about it. I just I don't know. I just felt like it it wasn't I just couldn't trust it with those topping tails. It's really as simple as that. So, so then we had that one and then what else did we have? Um there were a couple other stocks hit the scanners a little bit a few minutes later. We had PLA that hit the scanners and I was like no PLA, you know, it's a US company. I'm not sure if that's going to work. But after all these stocks were making big moves, finally FRTT hits the scanners. And when I saw FRTT, it had news right here ties into AI data centers. So I'm like, okay, right, it's a Canadian company. And you guys know what I often say about Canadian, so I don't have to repeat myself here, but I'm not wearing, you know, anyways, I won't get on a tangent. So here we have 409. We've got this double top on the daily, but I also was thinking this is potentially a blue sky setup over 409, you know, all-time highs, which I like. So, as it starts to squeeze up, I was like, you know what? I've already missed a couple. I'm not missing this one. And so, as it squeezes here, I decide to punch it right about there. And this was similar to uh the trade on AIHS that I skipped on. So, this ends up going up to 2, 250, up to three. And as it's going higher, I'm adding, I'm adding, I'm adding, I'm scaling into it. I'm like, "Okay, here we go. Now we're really moving. This is going to be awesome." $4, blue sky, and then 678. And it hits a high of 335, and then it knifes back down to two, bounces back off 2 to 250, drops back below VWAP. And so I I ended up averaging myself way too high on it. And as it came back down, selling as it dropped back down. Now, my unrealized P&L was a pretty big green day. But as I finished, I'm up, as you can see here, $19,000. I tried to do a couple of dip trades. I wasn't getting filled. Some of the dip trades didn't work very well. You know, this just ended up being a another stock that failed. And we can, and that is the theme from today. Lots of topping tails. Look at this rejection here. Rejection. Now, this one rallied back up, but many of the others did not. MGI, this one rejection and straight down AC um a STC. This one pops up immediately rejecting. So, today it was really tricky. And we had sort of this combination of we had some US companies, we had some Canadian, you know, the the one that was Chinese, WXM, it's not been super clean. It's been lots of topping tails. So, you know, I'm not really sure why today ended up being as difficult as it was. In hindsight, I wish that I hadn't been so aggressive on FRTT. You know, I I again, I think this speaks to the a little bit of FOMO in the market, you know, and and in me as well as a trader. We've been having big moves. I kind of miss a couple and then I'm like, "Oh man, I don't want to miss the next one." So, I get aggressive on it, but then that one doesn't work. And then I'm like get a little timid. I don't know about the, you know, should I jump in WXM right here? You know, I just had that kind of close call, but then this does work except only sort of because then it rejects back down. You know, yesterday we had um socket SC uh KT which gave this really incredible move and I was a little bit worried that this would create some FOMO in the market for these lowerric stocks. Uh but the reality is it's very uncommon to have a stock go from 50 cents to $4 a share. And look at that topping tail. It did the same kind of thing. It knifed back down. I bought the dip and rallied back up, but trying to anticipate which one's going to be the next one to do this. I mean, these happen pretty infrequently. The WXM kind of moves of, you know, 100 200% in this price range are more common, but this one just wasn't as clean. One challenge that we have is that we don't know, you know, some of these companies like FRTT. I mean, the amount of sellers that lined up on that. I I don't think it was short sellers. I think it was probably the company or some insiders that were selling because, you know, you just don't have that amount of selling that quickly in a typical uh in a typical scenario. I mean, even from short selling, that was just a lot of high volume selling and it just brought it right back down. So, you know, sometimes in a hot market, uh, we can have like one hot day, you know, another hot day and then it's like totally dead and a lot of traders get faked out and then it goes right back to being hot. In a colder market, sort of the inverse where it's cold, cold, cold, cold, and then you have one day that's really hot and then it's back to being cold. So that can make it challenging in terms of position sizing. You know, yesterday was a ended up being a really good day. So I sized up, you know, even bigger today and that didn't pay off, right? So I mean big picture, you know, I'm making progress, but it didn't pay off in the sense that I thought that trade was going to really explode and I didn't get reward from adding as high as I did. as it kept pushing higher and higher. I ended up being, you know, in way too high when it then flipped and dropped back down. And I don't like it when that happens. So, you know, that now has me a little bit on alert. Uh the the look the last I mean really the last couple weeks have been kind of like this where um you know back on the whiteboard it's been like you know huge momentum and then sort of slower and huge momentum and slower where it's like these days we're having 1,000 2,000% moves and then here it's like you know lots of well I don't know the ratio the percentage but lots of like round trips where we pop and drop and drop and then we're right back at it the next day and then it's back to round trips and then we're right back at it. And so if your P&L looked like this where you're making big money one day and then the next day you're giving back profit because you're trading too much size and things aren't working and then you're back at it the next day. I I I get it. I mean that's it's very easy for that to happen and I myself have, you know, gotten on the wrong side of a few of these and taken a few losses that were bigger than I would have liked to have uh taken. So right now WXM is halting back down. So, halting down right there. I don't know, guys. It's kind of a little bit of a tricky day. So, the fact is um after the open, you've got to now contend with halt. So, I feel like uh it's not going to get easier. Now, on Friday, we had YJ, which ended up um you know, having this sort of big move during regular hours, but it was backtoback halts and relatively light volume as it built up. And so by the time it really had high volume, well, it was so extended you couldn't really get a good position up there and then traders, you know, shorted it right back down. So ended up being another more or less round trip. So I think that um you know, whatever today is not we didn't have a lot of good opportunities today, which is discouraging, but um you know, sometimes it's like that. And it doesn't mean the week is ruined. It just means that, you know, we've got to be a little bit more cautious going into tomorrow to see what is really showing conviction uh if there's better sentiment in the market or if traders are continuing to be a bit um you know, gunshy about jumping on some of these in which case shorts are going to be more confident and we will see more rejections. So, that's where we're at right now. It's just, you know, taking it day by day and I'll be back at it streaming first thing tomorrow morning, 7 a.m. But I'll remind you as always that trading is risky and my results are not typical and there's no guarantee you'll find success whether you trade with me or you learn on your own. So please manage your risk and always practice in a simulator before putting real money on the line. With that, I'll see you guys tomorrow morning at 7 a.m. Eastern Standard Time.